Employees come first 'in good or bad times'
Written by Eileen Lian
With no end in sight to the global financial meltdown, companies have to look at different ways to save costs in order to ride out the economic crisis. For Dairy Farm, the priority is very clear - its people come first. 'Our human resources policy is rather simple. We respect people and we invest in people. In good or bad times, there is no change,' said Caroline Mak, group specialty retail director at the Dairy Farm Group. 'During our contingency planning for the financial tsunami, our group CEO said that in planning cost savings we should not cut people or training and development costs.'
The group employs more than 75,000 people in its 4,649 outlets, including supermarkets, health and beauty stores, convenience stores, home furnishing stores and restaurants. It owns such household names as Wellcome, Mannings, Ikea and 7-Eleven.
Although it is a plus to even have a job in the present economic climate, salaries are still an important factor when it comes to attracting and retaining the best employees. In addition to 'fair wages', Dairy Farm rewards its executive staff with a contractual bonus scheme.
The retail giant calls this its 'balanced scorecard' - an additional bonus that is paid on top of the 13th month bonus. Employee scores are computed based on job rank, department and corporate sales and profit numbers, and achievement of the employees' personal goals, previously agreed on and weighted with line managers.
This score then determines the extra bonus due to the staff. 'The approach is very objective. It is very clear cut and structured,' Ms Mak said. 'In a lot of companies, the bonus is discretionary.'
According to Ms Mak, it is important for companies to treat their people as assets. 'Any business is 50 per cent run by processes, systems, and standard operating procedures. The other 50 per cent is made up of people who make it all happen. Processes can't run themselves. It is people who work the business,' she said.
The group has a human resources planning (HRP) system that is central to the company's efforts in staff training and development, and succession planning. Divided into two parts, the HRP consists of the usual year-end performance appraisal and an April/May follow-up that reviews the development needs of the individual and succession planning requirements.
'The HRP is important to nail down training needs and to get the business managers to invest in staff training,' Ms Mak said. 'It is also important for succession planning.'
Dairy Farm uses both in-house and external training programmes for its staff. In Hong Kong, it has a training school that provides a training and induction programme for all its front-line staff. There is a structured curriculum that includes product training, soft skills, such as customer service, and leadership skills.
'For a big company, you must have a structured plan so that everyone is doing the same thing,' she said.
Another important human resources element in keeping Dairy Farm staff happy and productive is the 'human touch'. 'If someone has earned some credit or accomplished something, don't just send a letter - add some chocolates or give the person a phone call,' she said.
'People underestimate how much staff, especially those at the junior levels, treasure their names being remembered.'
She likened all these little gestures to bank deposits that grow over time. 'It is like putting away HK$100, HK$200 in the bank. You have to work on it every day, every month, every year,' she said.
'We are always very concerned with the perceptions of our customers. We also need to treat our staff, who are our internal customers, well, just like we do with our external customers.'
From her perspective, it is important to make sure that all employees are engaged and treated with respect. 'A high-morale team is very different from an average team, particularly in the service industry,' she said, drawing on her 20 years of experience running retail operations.
People come first at retail giant Dairy Farm. In planning cost savings, they pledge not to cut people or training and development costs
Executives are paid a contractual bonus over and above the 13th month bonus.
The contractual bonus is calculated objectively, using a 'balanced scorecard' approach
Relies on its human resources planning system to determine the training and development needs of staff and for succession purposes
Dairy Farm places importance on the 'human touch'. Small gestures, such as a phone call, go a long way towards boosting staff morale and productivity'